The Reserve Bank of India has approved the Areion Group’s proposed ₹936 crore acquisition of Aviom India Housing Finance, the fraud-hit mortgage lender that was pushed into insolvency in early 2025. The RBI also granted its mandatory fit-and-proper approval to Areion Group promoter Manish Lalwani, clearing the regulatory path for a change in control of the regulated housing finance company. The deal, which has already received unanimous backing from secured lenders, now moves to the National Company Law Tribunal (NCLT) for final approval.
What Was the Aviom India Housing Finance Crisis?
Aviom India Housing Finance was a New Delhi-based affordable housing finance company that primarily served low-income households in semi-urban areas. It offered loans for home extensions, refurbishments, and loans against property. The company was founded in 2016 by Kajal Ilmi, and its loan book grew rapidly from ₹1,034.9 crore in FY23 to ₹1,752.4 crore by March 2024.
The troubles began in late 2024 when a whistleblower complaint alerted the National Housing Bank (NHB) to irregularities in Aviom’s books. A subsequent forensic audit by Ravi Rajan and Co., conducted under NHB supervision, revealed that Aviom had inflated its mutual fund investments to present a higher cash balance on its books. The scale of manipulation was such that the company’s former statutory auditors advised against relying on its financial statements for the past three financial years.
Aviom admitted it had discovered fraud within the company and filed a criminal complaint with the Economic Offences Wing (EOW) in November 2024. It also warned lenders of potential delays in interest payments.
How the Insolvency Resolution Process Unfolded
The regulatory response was swift. On January 27, 2025, the RBI superseded Aviom’s board of directors, exercising its powers under Section 45-IE(1) of the RBI Act, 1934, based on the recommendation of the NHB. This section empowers the RBI to remove the board of a non-banking financial company (NBFC) or housing finance company (HFC) when governance concerns arise.
The RBI appointed Ram Kumar, a former Chief General Manager of Punjab National Bank, as the Administrator. A three-member Advisory Committee was also constituted to assist him.
On January 29, 2025, the RBI filed an application with the NCLT under the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019, commonly called the FSP Insolvency Rules. The NCLT admitted the company into insolvency on February 20, 2025.
Under these rules, only a financial sector regulator can refer a financial service provider for insolvency. Instead of a traditional resolution professional, an administrator nominated by the regulator takes over the company’s management.
The Committee of Creditors (CoC) then invited resolution plans. In February 2026, the Areion Group emerged as the winning bidder with an unconditional ₹936 crore offer, despite a higher but conditional bid of ₹977.5 crore from Unity Small Finance Bank. Lenders chose Areion’s plan because it was unconditional and offered greater certainty of completion. The deal is expected to deliver a recovery of about 65% for Aviom’s lenders.
What Is the RBI’s ‘Fit and Proper’ Approval?
The RBI’s fit-and-proper approval is a mandatory regulatory requirement for any change in control of a regulated financial institution, including housing finance companies. Before a person can acquire control or become a promoter of such an entity, the RBI must assess whether the individual meets the criteria of integrity, solvency, and competence.
This assessment derives from the Housing Finance Company (Reserve Bank) Directions, 2021 (updated in 2025), which require HFCs to ensure that their directors and major shareholders maintain fit-and-proper status. The RBI evaluates factors such as the person’s financial history, criminal record, regulatory compliance track record, and reputation.
In this case, the RBI granted fit-and-proper approval to Manish Lalwani, the promoter of the Areion Group. Lalwani is a Chartered Accountant with a Master’s degree in Commerce and has been heading the Areion Group for over a decade. Without this approval, the acquisition of Aviom could not have proceeded.
Who Is the Areion Group?
The Areion Group is a financial services firm based in Mumbai, founded by Manish Lalwani. The group provides services related to advisory, asset reconstruction, and investment management. It also operates through entities such as Omkara Assets Reconstruction and ACAIPL Investment & Financial Services.
In a related development, the Areion Group appointed Suresh Khatanhar, former Deputy Managing Director of IDBI Bank, as its Group Chief Executive Officer. Khatanhar brings over three decades of banking experience to lead the group’s strategy and business expansion.
Key Takeaways
- The RBI approved the Areion Group’s ₹936 crore acquisition of Aviom India Housing Finance under the corporate insolvency resolution process.
- Aviom India Housing Finance was a New Delhi-based affordable housing finance company founded in 2016 that defaulted after a ₹1,700+ crore accounting fraud involving inflated mutual fund investments.
- The RBI superseded Aviom’s board under Section 45-IE(1) of the RBI Act, 1934, and referred it to the NCLT under the FSP Insolvency Rules, 2019.
- The fit-and-proper approval granted to promoter Manish Lalwani is mandatory for any change in control of a regulated financial institution such as a housing finance company.
- Lenders chose Areion’s unconditional bid over a higher but conditional ₹977.5 crore bid from Unity Small Finance Bank, expecting a recovery rate of about 65% .
- The deal now awaits final approval from the National Company Law Tribunal (NCLT) to be fully completed.
